Summary
- The Momentum Growth Quotient for the company is 15.70, which is 72.30% higher than the average for the S&P 100.
- Shares present a forward rate of return of 21.86% at the current price.
- ChartMasterPro upward target price of $75.00.
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Shares of iRobot Corp. (IRBT) are down 48.10% since peaking on April 23, 2019, and in my opinion, the shares of the makes of the Roomba floor vacuuming robots are a compelling buy at current price levels. The company has a strong history of generating earnings growth, and the future growth ratios point to continued growth over the next 12 months. I lay out my bullish argument for the company below by reviewing some pertinent fundamental and technical aspects of the stock.
Momentum Growth Quotient
My Momentum Growth Quotient (MGQ) plays a critical part when it comes to determining if I'm going to go long or short a stock. Generally, I only want to go long a stock with an MGQ higher than that of the S&P 100, and I want to go short a stock with an MGQ lower than that of the index (for a more detailed explanation of how I calculate the MGQ, please see my blog post).
As of the end of July 2019, the MGQ for the S&P 100 was 9.07.
The current MGQ for IRBT stands at 15.70, which implies a 72.30% higher growth rate compared to the S&P 100. This tells us that IRBT has strong future growth potential and is a good candidate for a long position.
Financial Snapshot
Let's dig a little deeper into the financial data to get a better feel for how the company has performed on certain fundamental metrics and what these numbers imply for future growth.
Caveat Lector: I am a Quant Trader - that is, I seek to understand market behavior by using mathematical and statistical modeling, measurement, and research. So, you won't find much qualitative analysis in my work or in my trading process. The goal is to identify optimum entry points for trades based on my quantitative model and execute those trades as effectively as possible.
